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Court Upholds University’s Gift Use

November 22, 2013 Mark Hrywna

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A donor intent lawsuit could be heading to Maryland’s highest court after the state Court of Special Appeals on Thursday reaffirmed a November 2012 Circuit Court ruling in favor of Johns Hopkins University in Baltimore, Md.
The unanimous 30-page opinion ruled that “the operative contract frames Hopkins’ development rights solely and unambiguously in terms of permissible uses,” and the contract “does not limit the scale or density of the development, nor preclude leasing.”
The family of Elizabeth Banks, who sold the Belward Farm to the Johns Hopkins University, plans to file a petition asking the Maryland Court of Appeals – the state’s highest court – to review the lower court’s decision.
Banks lived on the 138-acre property in Montgomery County, Md., until her death in 2005. She sold the property to Johns Hopkins University for $5 million, despite an estimated market value of $54 million. The difference in price was considered a gift. Her nephew, Tim Newell, is the lead plaintiff and spokesman in the suit.
Under the agreement reached in 1988 between Banks and the university, most of the land could be used for academic or research purposes, which could be limited to 1.4 million square feet. The university has since had plans approved to develop more than 4.5 million square feet, including commercial use.
The three-judge panel ruled that the proposed development is “in full compliance with the university’s agreement with its former owners and is not limited “in terms of scale or density or ownership structure.”
“Once again, the courts have made a ruling in this case as if it is solely a matter of contract law,” Newell said. “This case is not about a contract. This case is about the misuse of a generous charitable gift by my aunt, a woman of modest means, to one of the nation’s wealthiest universities,” he said. Newell argues that his aunt, who for years opposed development of her property, eventually envisioned a bucolic, suburban campus that preserved the land while the university’s proposal has increased density substantially.
Johns Hopkins issued a statement saying that it’s gratified by the court ruling and “remains steadfast in its determination to develop the Belward Research Campus…in full compliance with its obligations under its agreement with Elizabeth Banks and her siblings.”
The unanimous opinion ruled that “the operative contract franks Hopkins’ development rights solely and unambiguously in terms of permissible uses,” and the contract “does not limit the scale or density of the development, nor preclude leasing.”